Are you working in a fantasy?

Associate Professor Jan Hayes and Emeritus Professor Andrew Hopkins speak with Helen Borger about their new book on fantasy planning, black swans and integrity management.

You may have convinced yourself that the detailed and meticulous plans you’ve spent hours developing will protect your organisation from hazards. But the reality could be quite different.

“Companies often try to convince themselves, regulators and members of the public that they have the relevant hazards under control, because they have elaborate plans to deal with them,” says a new book titled Nightmare Pipeline Failures: Fantasy planning, black swans and integrity management.

“When it comes to the point, these plans turn out to be wildly optimistic and full of unjustified assumptions and inaccurate data. Their function is symbolic rather than instrumental; that is, they serve as statements that the hazard is under control, rather than as real instruments of control.”

Loss of life and property
The book, by Jan Hayes, Associate Professor at the Centre for Construction Work Health and Safety Research at RMIT University, and Andrew Hopkins, Emeritus Professor in the School of Sociology at the Australian National University, examines the causes of the natural gas pipeline rupture in San Bruno, California, and the rupture of a pipeline carrying a diluted form of bitumen near Marshall, Michigan.

The San Bruno pipeline ruptured under a residential area in September 2010, causing a fire that killed eight residents and injured many more, and destroyed 38 houses and damaged 70 others. The Marshall pipeline ruptured in July 2010, causing a massive release of the diluted form of bitumen into the nearby river system. Residents were forced to sell up and leave their homes, while the pipeline owner paid more than $1 billion to clean up the spill.

Rules and regulations
As the title of the book suggests, both incidents involved fantasy planning and pipeline integrity failures and were foreseeable. Some in the industry refer to such incidents as ‘black swans’ because they view them as rare events and, critically, as unforeseeable.

In particular, both pipeline organisations fell prey to the compliance mentality. They unwisely relied on weak and prescriptive regulations to set the safety standard for their pipelines.

At San Bruno, this was evident in the lack of attention paid by the Pacific Gas and Electric Company (PG&E) to the safety margins of the maximum allowable operating pressure of an old pipeline.

“PG&E engineers were so focused on complying with the regulations that they never asked themselves, ‘What’s the safe way to operate this pipeline?’” says Hayes. “They were totally focused on ‘Does it comply with the regulations?’ [But] the regulations had this clause that allowed them to grandfather [the] old pipeline [into the new regulatory regime], so as safety margins have improved over the decades none of this has applied to this pipeline.”

Leadership and expertise
The buck doesn’t stop with the engineers, though. “The standards and regulations themselves in the US have been very strongly influenced by industry and the whole regime is just enveloped in this atmosphere of cost-cutting and minimising expenditure,” Hayes says.

How do you change the gas industry’s focus? “Leaders have a lot to answer for here in terms of ensuring people focus on what’s important, [but] when you have leaders who are all lawyers and accountants who don’t really understand the gas business, it’s tricky,” Hayes says.

Organisations need to value technical expertise “and foster professional curiosity in all specialist areas—not just compliance for its own sake”, she says. “Ensure everyone, especially senior management, understands the consequences of their actions.”

Changes in the reporting chain are also crucial. Rather than engineers reporting to managers with commercial goals, a functional reporting structure should be implemented, Hopkins says. “Engineers [should] report to senior engineering managers up the line … with an emphasis on engineering excellence, not commercial interests,” he says. “[At PG&E] the engineers were not listened to and were very junior and [they] operated off a regulatory regime that was weak and prescriptive.”

If the US implemented a regulatory regime based on risk management, what is reasonably practicable and process safety— and not focused on lost time injuries—the risks would be better managed, Hopkins adds. The likelihood of future catastrophic explosions would also decrease.